The HR Trove by Willis Towers Watson logo

2019 Severance Plan Design Survey Results: market insights on severance plan design principles

Jan 28, 2020 3:19:38 PM / by The HR Trove by Willis Towers Watson

Severance Plan Design - two people viewing a laptop

Willis Towers Watson’s 2019 Severance Plan Design Survey offers insight into severance design features for all levels in an organization.

Pay-for-performance considerations continue to headline compensation-related discussions.  While many of the discussions focus on how best to reward high performance, it is also important for compensation professionals to understand the trends in severance offered to non-performers and others exiting the organization.  With an ever increasing demand for severance data for broad-level employee positions, due to publicly available information being primarily executive-based, this survey, which was completed in the spring of 2019 and includes submissions from 235 companies, provides valuable market insights on severance design practices for all organizational employee levels without a change-in-control (CIC) and in connection with a CIC. This survey delves into the following severance plan features:

  • Cash severance, including bonus treatment
  • Severance by employee group — minimums, maximums and multiples of pay for CIC
  • Treatment of long-term incentives — forfeited, accelerated vesting, continued vesting, actual versus target performance and double versus single-trigger in the case of a CIC
    • Benefit continuation prevalence and duration
    • Medical, dental and vision
    • Life insurance
    • Vacation
    • Perks
    • Outplacement assistance
  • Retirement — additional crediting prevalence
  • Restrictive covenants and duration

Prevalence and eligibility

As a preview of the survey findings, the overall prevalence and eligibility results presented are as follows:

  • 90% of participants have standard severance practices, either with or without formal written policies.
  • All full-time salaried employees are eligible for severance at a vast majority of organizations.
  • Hourly full-time employees are eligible for severance at slightly more than three-quarters of organizations.
  • Hourly part-time employees are eligible for severance at slightly more than half of organizations.
  • It is extremely uncommon for participants to extend severance eligibility to interns, students or temporary workers.

Severance blog -prevalence of severance practices graphic

Survey results access

How do your severance plans compare to market? Do participants and investors agree that payouts are appropriate? Are you ready for 2020 planning discussions? Willis Towers Watson can help you answer these questions and more. We are now offering companies the opportunity to run custom peer group and industry cuts. For information on how you can purchase a custom cut of the results of the 2019 Severance Plan Design Survey, please contact your Willis Towers Watson compensation consulting partner, or reach out to Stuart James or Chris Marques.

About the survey

The 2019 Severance Plan Survey provides market insights on severance design practices without a CIC and in connection with a CIC based on submissions from 235 participants in North America (64% publicly traded, 88% U.S. headquartered). Willis Towers Watson conducted the survey based on data submitted by our clients and other participating companies.

View The Severance Policy Report Now


This blog was originally published on the Willis Towers Watson Wire, September 30, 2019.

Blog Contributors

Christopher-MarquesChris Marques, Consultant in the Executive Compensation practice








Stuart James - Small Stuart James, Director in Executive Compensation practice









Topics: compensation, future of work, compensation strategy, compensation design

The HR Trove by Willis Towers Watson

Written by The HR Trove by Willis Towers Watson

The HR Trove is an online store designed for HR Pros offering best-in-class advice, tips, tools and products from the HR experts.